Dubai: The UAE central bank’s quarterly report indicated that total real GDP increased by 8.2 per cent annually in the first quarter of 2022.
The central bank expects real GDP to grow by 5.4 per cent in 2022 and 4.2 per cent in 2023, and expects non-oil GDP to increase by 4.3 per cent and 3.9 per cent in 2022 and 2023, respectively.
“There is a higher probability for growth being stronger, driven by higher oil production and by the government commitment to double the size of the manufacturing sector by 2031,” the central bank said in its report.
Following the OPEC+ decision to keep increasing production for all member countries by over 400,000 barrels per day in 2022, oil production in the UAE is estimated to have increased by 13 per cent to more than three million barrels per day, the report added.
The regulator projects oil GDP to grow by 8 per cent and 5 per cent in 2022 and 2023, respectively, with both years depending on how the Ukraine conflict plays out, as well as further post-Covid recovery stance.
Total non-oil exports increased 17.3 per cent at Dh88 billion in Q1 2022, while re-exports increased by 20.4 per cent to reach Dh130.5 billion, the central bank noted, while imports were up 21.7 per cent to at Dh281.2 billion.
India was UAE’s top non-oil export partner, followed by Saudi Arabia and Switzerland.
Merchandise-wise, gold topped the list of leading commodities included in the UAE’s non-oil foreign trade (17 per cent), followed by diamonds, communication devices, mineral oils, jewellery, and cars.
Federal government revenue picked up in the last quarter of 2021 because of the increase in both oil production and non-oil economic activity, and is expected to rise further given the rise in oil and gas prices and the expected increase in production.
The central bank credited the inflow of tourists as a major contributing factor to the economy’s growth.
The number of international guests arriving in Dubai more than tripled in a year, increasing from 1.27 million in Q1 2021 to 3.97 million in Q1 2022. Also, the average occupancy in Dubai hotels increased from 64 per cent to 82 per cent during the same period last year, while average revenue by available room more than doubled (from Dh251 to Dh534). Preliminary data for Abu Dhabi also shows a remarkable increase in room occupancy as well as average room revenue in Q1 2022, compared to the same period in the previous year.
The UAE’s average PMI remained above the 50 level in Q1 2022, a trend that has been continuing for 16 straight months, reaching 54.8 at the end of March 2022. Output and new orders continued to grow sharply amid a modest increase in export sales. Based on the PMI survey in March 2022, domestic sales were the main driver of GDP growth, and the rate of new business growth in the UAE non-oil firms remained close to the post-pandemic high of November 2021.
The consumer price index (CPI) increased by 3.4 per cent during 2022 Q1, the central bank said, compared to 0.6 per cent and 2.3 per cent in Q3 and Q4 2021, respectively. Average prices of transportation services rose by 22 per cent year-on-year during the first quarter, as a result of the increase in fuel, oil and car prices.